The Labor Prospect: Employing Standards

AP Photo/M. Spencer Green

McDonald's workers and supporters rally outside a McDonald's, Wednesday, April 15, 2015, in Chicago. 

Welcome to The Labor Prospect, our weekly round-up highlighting the best reporting and latest developments in the labor movement. 

In case you haven’t heard (and we can’t imagine how you couldn’t have), the NLRB announced a blockbuster decision that could turn modern labor relations on its head. In its Browning-Ferris case, the labor board ruled that companies are legally joint-employers with their contractors, staffing agencies, and franchisees.

“With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the Board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances,” an NLRB statement read.

What does this mean? Essentially, when contract, franchise, or temp workers unionize and bargain a contract, the company who has hired their employer must also come to the bargaining table. Businesses that have embedded contract or temp employment into their operations as a way to cut costs will now be more responsible for those workers.

It’s also worth noting that these parent companies will now be on the hook for wage and hour and safety violations that were previously stuck with the contractor, etc. As The Washington Post reports, this could either mean that these companies try to distance themselves to avoid the joint-employer standard or accept the new reality and become even more involved.

Many quickly homed in on the impact that the decision would have on union organizing efforts at McDonald’s, which has used its franchise model as a way to thwart such drives. The New York Times reports that this ruling could have a direct impact on separate NLRB complaint against McDonald’s in that it could make the burger giant liable for alleged workplace violations at a number of franchise locations.

Other labor experts are more interested in the sweeping implications Browning-Ferris could have in the e-commerce and manufacturing sectors, which are highly dependent on contract and temp employment. According to Reuters, union leaders see abundant organizing potential for the workers who are staffed to run Amazon, Walmart, and Google warehouses. Additionally, unions see new hope in the manufacturing sector, which has become highly fissured. “You literally can walk into almost any non-union manufacturing plant in the United States and you’ll see workers working on a line and not be able to distinguish who is temp from an agency and who is a direct employee of the company,” AFL-CIO’s organizing director told Reuters. For more on this, read Harold Meyerson’s exploration of the 100,000 perma-temp and contract workers who fuel Walmart’s supply chain (yet are employed by 270 temp agencies) and Change to Win’s push to unionize them in California.

Labor Legacies

In light of the NLRB’s latest decision, some have taken the chance to paint a picture of Obama’s legacy on worker rights. Citing the administration’s recent accomplishments on overtime eligibility, misclassification guidelines, and a federal court decision giving home-care workers minimum wage protections, Noam Scheiber declared in The New York Times: “With little fanfare, the Obama administration has been pursuing an aggressive campaign to restore protections for workers that have been eroded by business activism, conservative governance and the evolution of the economy in recent decades.” The article does go on to acknowledge critiques of Obama’s slow appointment of NLRB appointees in his first term and the point that as long as discretionary spending in the federal budget declines, the Department of Labor will have a lackluster ability to enforce such new protections.

At Politico, Timothy Noah and Brian Mahoney write that “President Barack Obama may end up doing more for the struggling labor movement than any president in three decades” due to the NLRB’s string of pro-labor decisions, in addition to the aforementioned feats that Scheiber alludes to. It’s worth noting, though, that the past three decades of presidents have not exactly set the highest standard in terms of championing workers’ rights. What’s that thing about a big fish in a small pond?

App-lying a New Approach

In breaking legal news, Buzzfeed News reports that a federal judge has just granted class-action status to Uber drivers who are suing over what they argue are costs incurred (gas, maintenance, etc.) through misclassification as independent contractors. This developing story could have tremendous impacts on the legal employment structure of the ride-sharing giant. 

In another (possibly) groundbreaking development, a Seattle councilmember will introduce a bill next week that would give on-demand drivers for companies like Uber and Lyft the right to collectively bargain with their respective employers. It’s a right that independent contractors—and Uber is adamant that is what its drivers are—do not have in federal labor law. But if it passes and is held up in the courts, it could be applied more broadly. As Lydia DePillis writes for The Washington Post, “[i]f it worked, it could theoretically be extended to cover other kinds of independent contractors, like the port truck drivers who ferry containers from docks to rail yards and warehouses, or other workers on internet platforms like Taskrabbit.” However, there remains a number of legal obstacles would have to be resolved in the courts.

On the opposite coast and in a rival sector, the New York City taxi industry is launching an app that would let customers hail a cab and pay for it with their smartphone. It’s a clear effort to compete with Uber and other app-based ride services. “It’s such a great idea you have to wonder what took so long,” Davey Alba muses at Wired.

Retail Reeling?

Gap, the nation’s biggest clothing retailer, announced last week that it will stop the controversial management practice of on-call scheduling. As Timothy B. Lee explains at Vox, the retailer joins Victoria’s Secret and Abercrombie & Fitch in its response to growing pressure from labor groups that contend that such employment practices wreak havoc on workers’ personal lives. Federal labor law offers no protections for unpredictable scheduling. The retailer says it will schedule its workers with “10 to 14 days of notice.”

While Walmart spends $1 billion on increased wages and additional training for its workers, Bloomberg Business reports that the retailer has been cutting hours for some of its employees in order to minimize costs. Walmart says it’s only cutting hours for overstaffed stores, but some workers have said that they’re covering the duties usually covered by multiple employees. Meanwhile, some senior workers argue that the increase to a $9 starting hourly wage is unfair because they aren’t seeing a corresponding raise in their own pay.

Wage Wins

St. Louis officials agreed to increase the city’s minimum wage to $11 by 2018, the result of previous disagreement on a proposal for $13 by 2020. The AP reports that the city council passed the ordinance last week before the Republican legislature can overturn a gubernatorial veto that maintained cities’ right to establish their own wage floors.

Meanwhile, on the other side of the state a business group that’s opposed to raising the minimum wage in Kansas City has succeeded in its effort to bring put the issue to the ballot in 2015. The group, Missourians for Fair Wages, organized in response to the city council’s minimum wage raise to $8.50 with incremental hikes to $13 by 2020.

Citing the exorbitant cost of living, the Silicon Valley hub of Palo Alto city council has raised its minimum to $11 an hour, two bucks more than the state minimum. While the council declined to commit to a future hike to $15, it said it merits further study.


Obama’s approval rating among union members is down to 52 percent, just one percentage point above his all-time low among that group, according to a new Gallup poll.  

The Chronicle of Higher Education breaks down how difficult it is state-by-state to pay college tuition with a minimum wage job.

A look at the kafala labor system, and the push to unionize Lebanon’s domestic workers.

At the Prospect…

As the Fed hints that it may increase interest rates, is it ignoring the striking dissonance of recovery strength? Sam Ross-Brown explains how communities of color continue to lag behind in the post-recession economy, and highlights a grassroots push to pressure the Fed to put workers before bankers. The effort is about answering two questions: “Whose recovery is this?” and “Whose Federal Reserve is this?” Read more…

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